EMPLOYMENT AGREEMENT

Agreement made, effective as of January 1, 2006, by and between Park City Group
Inc., a corporation organized and existing under the laws of the State of
Nevada, with its principal office located at 333 Main Street, Park City, Utah,
referred to in this agreement as employer, and Patrick Paterson, of
_________________________, Utah, referred to in this agreement as employee.

                                    RECITALS

A. Employer is engaged in the business of Software Development and Business
Consulting.

B. Employee has been engaged in and is experienced in the above-designated type
of business.

C. Employee is willing to be employed by employer, and employer is willing to
employ employee, on the terms, covenants, and conditions set forth in this
agreement.

In consideration of the matters described above, and of the mutual benefits and
obligations set forth in this agreement, the parties agree as follows:

                                  SECTION ONE.

                                   EMPLOYMENT

A. Employer employs, engages, and hires employee to be primarily responsible for
driving the marketing function at Park City Group. Employee accepts and agrees
to such hiring, engagement, and employment, subject to the general supervision
and pursuant to the orders, advice, and direction of employer.

B. Employee shall perform such duties as are customarily performed by one
holding such position in other, same, or similar businesses or enterprises as
that engaged in by employer, and shall also additionally render such other and
unrelated services and duties as may be assigned to him from time to time by
employer.

                                  SECTION TWO.

                            BEST EFFORTS OF EMPLOYEE

Employee agrees that he will at all times faithfully, industriously, and to the
best of his ability, experience, and talents, perform all of the duties that may
be required of and from him pursuant to the express and implicit terms of this
agreement, to the reasonable satisfaction of employer.

<PAGE>

                                 SECTION THREE.

                               TERM OF EMPLOYMENT

The term of this agreement shall be a period of four years, commencing January
1, 2006 and terminating December 31, 2009, subject, however, to prior
termination as provided in this agreement. Beginning January 1, 2010 this
agreement shall be considered renewed for regular periods of one year, provided
neither party submits a notice of termination.

                                  SECTION FOUR.

                            COMPENSATION OF EMPLOYEE

Employer shall pay employee, and employee shall accept from employer, in full
payment for employee's services under this agreement, compensation at the rate
of $90,000 per year, payable twice a month on the 15th and last day of each
month while this agreement shall be in force.

Employer shall reimburse employee for all necessary expenses incurred by
employee while traveling pursuant to employer's directions.

                                  SECTION FIVE.

                  TERMINATION DUE TO DISCONTINUANCE OF BUSINESS

In spite of anything contained in this agreement to the contrary, in the event
that employer shall discontinue operating its business, this agreement shall
terminate as of the last day of the month in which employer ceases operations
with the same force and effect as if such last day of the month were originally
set as the termination date of this agreement.

                                  SECTION SIX.

                                OTHER EMPLOYMENT

Employee shall devote all of his knowledge and skills solely to the business and
interest of employer, and employer shall be entitled to all of the benefits,
profits, or other issues arising from or incident to all work, services, and
advice of employee, and employee shall not, during the term of this agreement,
be interested directly or indirectly, in any manner, as partner, officer,
director, shareholder, advisor, employee, or in any other capacity in any other
business similar to employer's business or any allied trade; provided, however,
that nothing contained in this section shall be deemed to prevent or to limit
the right of employee to invest any of his money in the capital stock or other
securities of any corporation whose stock or securities are publicly owned or
are regularly traded on any public exchange, nor shall anything contained in
this section be deemed to prevent employee from investing or limit employee's
right to invest his money in real estate.

                                      -2-
<PAGE>

                                 SECTION SEVEN.

                    RECOMMENDATIONS FOR IMPROVING OPERATIONS

Employee shall make available to employer information of which employee shall
have any relevant knowledge and shall make suggestions and recommendations that
will be of mutual benefit to employer and employee.

                                 SECTION EIGHT.

                                  TRADE SECRETS

Employee shall not at any time or in any manner, either directly or indirectly,
other than in the course of completing his normal business activity, divulge,
disclose or communicate to any person, firm, corporation, or other entity in any
manner whatsoever any information concerning any matters affecting or relating
to the business of employer, including but not limited to any of its customers,
the prices it obtains or has obtained from the sale of, or at which it sells or
has sold, its products, or any other information concerning the business of
employer, its manner of operation, its plans, processes, or other data without
regard to whether all of the above-stated matters will be deemed confidential,
material, or important, employer and employee specifically and expressly
stipulating that as between them, such matters are important, material, and
confidential and gravely affect the effective and successful conduct of the
business of employer, and employer's good will, and that any breach of the terms
of this section shall be a material breach of this agreement.

                                  SECTION NINE.

                  TRADE SECRETS AFTER TERMINATION OF EMPLOYMENT

All of the terms of Section Eight of this agreement shall remain in full force
and effect for the period of two years after the termination of employee's
employment for any reason.

                                  SECTION TEN.

                             ADDITIONAL COMPENSATION

Provided employee remains employed by employer, employee will receive a signing
bonus of 714,288 shares of Company Stock that will vest at a rate of 25% or
178,572 shares per year for four years.

Employee will participate in the companies Senior Executive Bonus Plan.

                                      -3-
<PAGE>

Employee shall also be granted stock options for two (2) shares of stock for
each share of stock that is purchased and paid for in cash during the first two
years of employment. These options will be issued at the current stock price at
the time of issuance.


                                 SECTION ELEVEN

                         AGREEMENTS OUTSIDE OF CONTRACT

This agreement contains the complete agreement concerning the employment
arrangement between the parties and shall, as of the effective date of this
agreement, supersede all other agreements between the parties. The parties
stipulate that neither of them has made any representation with respect to the
subject matter of this agreement or any representations including the execution
and delivery of this agreement except such representations as are specifically
set forth in this agreement, and each of the parties acknowledges that each
party has relied on its own judgment in entering into this agreement. The
parties further acknowledge that any payments or representations that may have
been made by either of them to the other prior to the date of executing this
agreement are of no effect and that neither of them has relied on such payments
or representations in connection with their dealings with the other.

                                 SECTION TWELVE.

                                    VACATION

Employee shall be entitled to ten days of paid vacation each year during the
term of this agreement, the time for such vacation to be determined by mutual
agreement between employer and employee.

                                SECTION THIRTEEN.

                            MODIFICATION OF AGREEMENT

Any modification of this agreement or additional obligation assumed by either
party in connection with this agreement shall be binding only if evidenced in
writing and signed by each party or an authorized representative of each party.


                                SECTION FOURTEEN.

                                   TERMINATION

A. This agreement may be terminated by either party on thirty (30) days written
notice to the other. If employer shall so terminate this agreement, employee
shall be entitled to severance pay equivalent to his regular pay for five (5)
days, for each year of service to the company.

                                      -4-
<PAGE>

B. In the event of any violation by any party of any of the terms of this
agreement, any party may terminate employment without notice and with
compensation to employee only to the date of such termination, with the
exception of any accrued vacation time owed to employee.

C. It is further agreed that any breach or evasion of any of the terms of this
agreement by either party will result in immediate and irreparable injury to the
other party and will authorize recourse to injunction and or specific
performance as well as to all other legal or equitable remedies to which such
injured party may be entitled under this agreement.

                                SECTION FIFTEEN.

                          EFFECT OF PARTIAL INVALIDITY

The invalidity of any portion of this agreement will not and shall not be deemed
to affect the validity of any other provision. In the event that any provision
of this agreement is held to be invalid, the parties agree that the remaining
provisions shall be deemed to be in full force and effect as if both parties
subsequent to the expungement of the invalid provision had executed them.


                                SECTION SIXTEEN.

                                  CHOICE OF LAW

It is the intention of the parties to this agreement that this agreement and the
performance under this agreement, and all suits and special proceedings under
this agreement, be construed in accordance with and under and pursuant to the
laws of the State of Utah and that, in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with, or by reason
of this agreement, the laws of the State of Utah shall be applicable and shall
govern to the exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be instituted.

                               SECTION SEVENTEEN.

                                    NO WAIVER

The failure of either party to this agreement to insist upon the performance of
any of the terms and conditions of this agreement, or the waiver of any breach
of any of the terms and conditions of this agreement, shall not be construed as
thereafter waiving any such terms and conditions, but the same shall continue
and remain in full force and effect as if no such forbearance or waiver had
occurred.

                                      -5-
<PAGE>

                                SECTION EIGHTEEN.

                                  ATTORNEY FEES

In the event that any action is filed in relation to this agreement, the
unsuccessful party in the action shall pay to the successful party, in addition
to all the sums that either party may be called on to pay, a reasonable sum for
the successful party's attorney's fees.

                                SECTION NINETEEN.

                               PARAGRAPH HEADINGS

The titles to the paragraphs of this agreement are solely for the convenience of
the parties and shall not be used to explain, modify, simplify, or aid in the
interpretation of the provisions of this agreement.

In witness of the above, each party to this agreement has caused it to be
executed as of the date set forth above.


EMPLOYEE                                        PARK CITY GROUP, INC.

_______________________________                 By:  _________________________
                                                its___________________________


                                      -6-